Question 2. (price cuts vs promotions)

Your regular price is $30/unit, unit variable cost is $20/unit and fixed costs are $3,000 per month. Because of the recession, your sales have dropped to 200 units a month, so you are losing money. You are considering two options to increase sales:(1) reduce the price to $28/unit, or(2) run an adver...

her things might make it harder to start your company again. So if you think your losses will only be for short term, it might be best to keep your company open if you can afford it. If you can't afford it, then you will have to shut down, but it might make it difficult to start up your company again and you might have lost customers that used to be loyal to you because you were not open for a period of time. All in all, it makes no sense to run a company that is losing money, but it depends on how long you think this will be happening. If it is only for a month or two, it might hurt you more to shut it down and reopen then it would if you just had the losses. If it is for a long period of time, it wouldn't make any sense to run a company that is losing money.

than another method. As an example, two ( 2 ) techniques have been appended that show how bond liabilities and interest expense are reported and measured in Australia and the USA. The first technique is called The Effective Interest Method and the other is called the Straight Line Method. The...

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Enron corporation was considered one of the country’s most innovative company in USA. Enron was a US based multinational company was based at Houston, Texas. The company was in business of...

’s Delivery, Inc. A $ 2 ,800 down payment was received with the balance of $14,500 due within 30 days. The cost of the delivery truck to Browne Motors was $13, 200 . e. Paid $4,950 to Steve’s Automotive for repair work on cars for the current month . f. Sold one of the new cars purchased from...

margin percentage would be 42%. Assuming a selling price of $15 per unit , determine the number of units (rounded to the nearest whole unit ) Associated would have to sell to generate earnings before interest and taxes (EBIT) of 32% of the amount of capital invested in the new product. CMA adapted

Garcia Co. owns equipment that cost $82,400, with accumulated depreciation of $43,600. Garcia sells the equipment for cash.
Record the sale of the equipment under the following three separate cases assuming Garcia sells the equipment for (1) $51,20
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Singh Enterprises, which started business on 1 January 2012, has a reporting period to 31 December and uses the straight-line method of depreciation. On 1 January 2012 the business bought a machine fo
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Singh Enterprises, which started business on 1 January 2012, has a reporting period to 31 December and uses the straight-line method of depreciation. On 1 January 2012 the business bought a machine for £10,000. The machine had an expected useful lif
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